Prepaid vs. Postpaid Connectivity: The Choice Is Yours

Postpaid plans, in which users are invoiced for actual usage at the end of the billing cycle, have dominated the market. However, prepaid plans, for which users make a one-time payment for a set amount of data, are rising. As connected devices increase, IoT device manufacturers and the service providers that use them need more ways to deliver — and pay for — the best connectivity.

Each plan has its advantages. Neither is better than the other. One plan could be better for a specific device, business plan, use case or deployment. Business requirements should be the determining factor behind your choice. 

Prepaid or Postpaid Connectivity Plans: How to Choose

Prepaid connectivity plans are cost-effective and work well for several use cases and stages in a company’s life cycle or evolution. These include:

• Startups
• No billing ecosystem established
• No direct line to the end customer (e.g., B2B2C)
• Vast device deployments with a specific lifespan (e.g., trackers, battery-powered devices, etc.)

In general, prepaid plans are useful for situations with no recurring relationship with the end customer. In addition, they are ideal when connectivity needs can be easily computed based on the device’s lifetime.

Good examples are: 

• Seasonal deployments such as agricultural sensors  
• Transport container trackers
• Tools that the public needs to access, like defibrillators in airports
• One-way “tags” embedded in items like high-value shipments with low environmental tolerance

Prepaid plans are well suited for the consumer space in which connectivity is invisible to the end customer. The simplicity of prepaid allows device providers to expand their reach into the lucrative consumer space without cumbersome record-keeping and invoicing.

Postpaid plans are also cost-effective and work for complex IoT deployments in which there’s an ongoing relationship with the customer and connectivity needs fluctuate. Under this model, end users are assured that they have the most cost-efficient plan and only pay for what they use. Postpaid plans can be customized to align with specific business goals.

Managing connectivity and how to pay for it can be an obstacle for developers. There are dozens of players in the IoT value chain. Dealing with multiple regions, devices and connectivity providers can be complicated. Layering on an invoicing system to bill customers accurately in a postpaid plan adds complexity. The ability to choose between prepaid and postpaid can be a game-changer in overcoming this obstacle.

Get the Plan That Works for You with Telit Cinterion

Your top priority is ensuring that your business gets the right solutions to fit its needs — and that those solutions function efficiently to their maximum ability. Comparing prepaid vs. postpaid plans and choosing the right one for your applications and deployments is crucial to success.

Some IoT providers offer only prepaid plans or only postpaid plans. Telit Cinterion offers both. Our connectivity plans enable you to combine prepaid and postpaid models within the same deployment and access those plans through one portal.

We’ve brought prepaid connectivity plans to our NExT™ multi-IMSI core network powered by Telit Cinterion. We enable turnkey services that give you access to more than 600 networks in over 200 countries. Our solutions make deployments simpler for you — and seamless for your customers.

Don’t leave money on the table because you don’t have the right payment model for your product. With the choice between prepaid or postpaid connectivity plans, you can bring your product or service to life in the best way for you and your customers. 

Editor’s Note: This blog was originally published on 25 March 2022 and has since been updated.